Contracting for Classroom Services - factors to consider before choosing private company

Are you prepared to assess the growing variety of private-sector providers of educational services and programs?

We'll do what's best for kids.

School administrators often express that conviction. So what's best for kids when a school management company or private-practice educators knock at your schoolhouse door saying, "We can help meet the children's needs?" Would you be willing to contract with private providers for educational services?

Savvy superintendents are disentangling themselves from the persistent debates about privatization, market-based reform and for-profit companies. Why? Because they understand that contracting is a delivery system option that may benefit students. Doing what's best for students is not just a slogan for these progressive leaders of public schools. These leaders also know that administering a purchase-of-services system will require new, yet-to-be-learned skills.

Policies and Protocols

Increasingly, school officials are authorizing, chartering and contracting with for-profit and not-for-profit organizations to operate entire schools or defined parts of the educational program. Edison Schools manages 79 schools across the country with plans to assume operation of many more this fall. Of Edison's 79 schools, 55 are contracted with a public school board. Of these 55, 19 are district-issued charter schools and 36 are traditional public schools. The 24 remaining schools Edison manages are independent charter schools.

Sylvan Learning operates their learning centers in 117 schools funded primarily under Title I. Success Lab contracts with 18 Chicago public schools to deliver reading programs under Title I. More than 100 school districts contract with companies such as Ombudsman Educational Services and Richard Milburn High School for the education of at-risk students. In a word, schools are buying the services they need. The contracting option was endorsed recently by the Education Commission of the States' Commission on Governing America's Schools.

Superintendents typically don't receive formal training in administering procurement systems. But a wealth of knowledge and practice is close at hand. County governments in many states contract with community-based organizations to provide human services to the elderly and persons with disabilities. Hospitals and municipalities have long contracted for basic services.

Most of these buyers of private-sector services have developed policies and protocols for requesting proposals, administering contracts and ensuring the desired results. While buying such services may be a new phenomenon in public education, it is by no means a unique or mysterious process. In addition, contracting for educational services provides superintendents with the ability to hold those performing the service accountable to agreed upon performance expectations. Such accountability is nearly nonexistent in the current ways of operating school districts.

Criteria to Evaluate

You can take the initiative to put in place systems for procuring educational services. By doing so, your power to effect improvements for students can be significantly enhanced.

As you develop a system for buying services from outsiders, you'll want to consider the following factors:

* Performance criteria.

Has your school district developed clear and measurable standards of student performance? How will your request for proposals specify your student performance expectations? How will you state the contractual obligations of the private provider regarding student performance, reporting results and modifying practices during the contract term?

Can the school board cancel the contract in mid-term for failure to meet performance standards? What performance criteria will apply when deciding whether to renew or not renew the contract?

* Legal issues.

Does the school board have the statutory authority under state law to contract with private providers for educational services? Does the collective bargaining agreement with the teachers union restrict or prohibit the school board from contracting for services? Does the state law impose any bargaining obligations before the board can proceed with contracting? Has your attorney developed a contract form that clearly states the obligations of both parties?

* Cost and efficiency analysis.

What will be the direct and indirect costs in contracting with a private provider? Have you developed the administrative expertise to conduct a bid process, evaluate proposals, award contracts and oversee the purchased services? Can you provide support to site-based decision-making teams regarding contracting?

* Contractor evaluation criteria.

What is the contractor's experience and reputation? What is the financial condition of the contractor? What procedures have others used to monitor the contractor's performance? Who are the contractor's current and former clients? How is the contractor best equipped to accomplish the objectives that you've identified? Does the contractor have in force the appropriate licenses, certifications and insurance?

* Political and public policy considerations.

What are the political realities and barriers to developing a purchase-of-services system? How will the essential features of the public system be maintained or enhanced when contracting for services? How will you address issues of staff morale, parental support and community acceptance?

Broader Options

For decades, the traditional structure of public schools was a given--an unchanging, input-driven state bureaucracy. That system searched for and found the one right or best way and applied it throughout.

Recently, there's been a shift in thinking about schools. The new thinking is described by words such as choice, quality alternatives, site-based accountability, individual learning styles, standards and assessments and performance-based learning. How does the contracting option fit the new paradigm? It doesn't mean an isolated contract with one company to operate one school.

Rather, as school officials develop their district's purchase-of-service capabilities, they'll want to think about the broader challenges and opportunities:

* How are you getting your community ready for multiple philosophical options each operating at high standards of quality?

* Are you soliciting proposals regularly from parents, teachers, youth and others for new charter schools?

* Have you thought about forming a new schools incubator that will allow educators to design a public school they've always dreamed about?

* What would it take to create a client-driven learning system where each student and family in your district can choose from an array of learning options?

The emerging education industry of companies, private practices of educators and Internet tutors is a reality. It is creating an explosion of entrepreneurial activity. A growing number of philanthropists and policymakers view the education entrepreneurs and competitive markets as instruments of education reform. As a school leader, you shouldn't wait for the new providers to come knocking. You can begin creating a climate in your community that supports new school choices, high standards of quality and a self-improving system.

Thinking and acting outside the box will allow school leaders to seize new opportunities to better serve students. It also will mean revisiting and redefining the enduring challenges of education-effectiveness, efficiency, liberty and equity. In the interests of students, go for it.

John Mclaughlin is founder of The Education Industry Report and a consultant on private-sector investment in education. He can be reached at 122 S. Phillips Ave., Suite 200, Sioux Falls, S.D. 57104. E mail: john@mclaughlincompany.com. Senn Brown is treasurer of the Association of Educators in Private Practice and a former administrator with the Wisconsin Association of School Boards.

Additional Resources

Selected resources on private-sector involvement in public education, compiled with the assistance of John McLaughlin:

Association of Educators in Private Practice (104 W. Main St., Suite 101, P.O. Box 348, Watertown, Wis. 53094-0348, www.aepp.org) represents individuals and small firms with products and services for elementary and secondary schools.

International Academy for Educational Entrepreneurship (21 Silk Oak Circle, San Rafael, Calif. 94901). Run by two former superintendents

The John McLaughlin Co. (122 S. Phillips Ave., Suite 200, Sioux Falls, S.D. 57104; www.mclaughlincompany.com) advises companies regarding private-sector activities in K- 12 and higher education.

National Center for the Study of Privatization in Education (Teachers College, Columbia University, 525 W. 120th St., Box 181, New York, N.Y. 10027). An independent research center, directed by Professor Henry Levin

"Guidelines for Contracting With Private Providers for Educational Services," published by AASA. Available from AASA Online (www.aasa.org) or AASA Publications Warehouse, 888-PUB-AASA or 301-617-7802

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